About this Show

On the Money With Maria Bartiromo

News/Business. (2013) Liz Ann Sonders, Charles Schwab; Heidi Moore, The Guardian; Howard Schultz, Starbucks; Dan Ackerman, Cnet.com. New. (CC) (Stereo)

NETWORK
NBC

DURATION
00:30:00

RATING
PG

SCANNED IN
San Francisco, CA, USA

SOURCE
Comcast Cable

TUNER
Channel 23 (219 MHz)

VIDEO CODEC
mpeg2video

AUDIO CODEC
ac3

PIXEL WIDTH
1920

PIXEL HEIGHT
1080

TOPIC FREQUENCY

Us 9, Cyprus 6, Samsung 5, U.s. 4, Vietnam 4, United States 3, Starbucks 3, Heidi Moore 2, Fed Ex 2, Liz Ann Sonders 2, Blackberry 2, Oracle 2, George Bush 2, America 2, Syria 2, Liz Ann 2, Heidi 2, Europe 2, Howard Schultz 2, Dan Ackerman 2,
Borrow a DVD
of this show
  NBC    On the Money With Maria Bartiromo    News/Business.  (2013) Liz Ann Sonders, Charles Schwab;  
   Heidi Moore, The Guardian; Howard Schultz, Starbucks; Dan...  

    March 24, 2013
    4:00 - 4:30pm PDT  

4:00pm
and empty atms after crisis left a $13 billion hole in the country's banking system. a bailout proposal from the eu came with strings attached in the form of a tax ranging between 6% and 9% on federally insured bank depositors in cyprus. most people i spoke to thought it was terrible idea. sheer what former treasury secretary larry summers told me. >> this idea that the little guy is the first victim in going after moral hazard is a new idea in resolving financial crisis and is not a very good idea as pictures of people lining up at the atm machines demonstrate. >> meanwhile, important earnings news this week. software giant oracle missed earnings expectations, as did transportation bellwether fed ex. general mills, housing company lennar and williams sonoma all came in ahead of expectations. more strength in the housing sector to report. new home starts roast 8/10 of a
4:01pm
percent in february, about what analysts were looking for. that's an annualized rate of 917,000 new homes. the federal reserve continuing its easy money policy and the banking crisis in cyprus. which is more important to your money? joining me right now to talk investing, liz ann sonders is chief investment strategist with charles schwab, and heidi moore is finance and economics editor at "the guardian." ladies, good to have you on the program. thank you so much for joining us. the fed staying pat that easy money policy. $85 million of bonds and mortgage-backed securities, buying those every month, keeping interest rates where they are. were you surprised at what came out of the federal reserve? what does this tell us? >> no, i wasn't surprised. they did slightly downgrade their gdp forecast. then again, they are well above the consensus. so i wouldn't view that as terribly concerning. and i think what is important this year is we've had these three consecutive mid-year slowdowns in the economy. we had it in 2010, 2011, 2012. everyone is on the lookout for
4:02pm
it again. i think what the fed has been doing represents a key difference between those three years and now, because then we had stopping and starting with qe. you had end dates. so you had the market in anticipation of ending and then wondering whether they were going to pick it back up again. because this is open-ended, i think the fuel that it provides is longer lasting and represents a key difference in part of the reason why i think we'll avoid this fourth consecutive slowdown. >> heidi, the other big story of the week is cyprus, of course. cyprus a tiny company. a big banking system that is a big percentage of the gdp of that tiny country. so how does this play out? how do you think this gets resolved? and should we worry about an impact in the united states? >> well, we definitely shouldn't worry that it's going to impact the united states, because we have different rules here. what happened in cyprus is europe likes drama. it's the birthplace of opera. it has the birthplace of a lot of forms of performance art. i think you could see this as a kind of performance art. initially to save cyprus, which
4:03pm
has needed a bailout for well over two years, european authorities went for the splashiest potential option, which is to literally take people's money out of their bank account. you can imagine the outrage. it took about three or four days for them to back off from that deal. and i think what will happen to cypress, as it has happened to other countries is that the real option, the real bailout is going to be much slower, much more boring. it's going to involve loans from the european central bank. it's going to involve, you know, maybe loans from other countries. but it's going to be a very nerdy, wonky option, maybe they'll shut down some banks temporarily, not just close the doors, but actually shut down a bank. and they'll work it out. be you haven't seen the markets react at all. >> i agree. i think what was telling was the lack of reaction that we saw. we did not see bank runs in spain and italy. we did not see spreads really widened out. the most recent spanish auction on the bond side went very well. so i think that was the most
4:04pm
important message to take from this. so you don't think this could ever happen in another country then? >> it doesn't appear. to i think you would think this might have triggered some of those concerns. so far no. >> no reaction. heidi, what about that news conference following the federal reserve's meeting and basically bernanke said he didn't think the markets were in a bubble. i found it interesting he even took the question. take a listen to. this. >> in the stock market, we don't see at this point anything that is out of line with historical -- historical patterns. in particular, you should remember, of course, that while the dow may be heating a high, it's in nominal terms. it's not in real terms. if you adjusted for inflation and the growth of the economy, we're still some danistance fro the high. >> were you surprised he even took the question about the markets and basically said no, we're not in a bubble. >> yeah. ben bernanke has never really openly spoken about his friendship with the markets. there have been a lot of accusations that a lot of what he has been doing in terms of
4:05pm
stimulus has been designed to help wall street, not main street. and he is just kind of ignored that and hasn't said too much about it. but here he was taking a position on whether we're in a bubble or not. i think you can actually question that position a little bit because, you know, corporate earnings have been a lot softer over the past couple of quarters than they were last year. >> i'm really glad you brought that up that is a critical point. and liz ann, we're about to begin first quarter earnings season at the end of march, of course, when the quarter ends. we heard from oracle. with we heard from fed ex. we had some disasters here. stocks really went down on the disappointments in terms of earnings. what are you expecting in terms of first quarter earnings? >> i think you are going to see a shift because the dollar has been so strong that will probably be to the detriment of some of the larger multinational companies. i think what you're starting to see, again, and we've seen it several times in the last couple of years is a bias again towards the smaller domestic-oriented companies, at least as it relates to the currency side of things. i think the reason why the market has not fallen off in the face of slowing earnings growth
4:06pm
is number one, there is a hope and an assumption that we may be listing in terms of the growth rate, and that q4 of last years q1 might be the trough when we get a little bit of a pickup. >> and more improvement later in the year? >> yes. and forward earnings are reasonably low. >> who is participating in this market right now? >> look, they're coming back, but it's not yet at a level which suggests caution. you had about $560 billion go out of equity mutual funds in the five years through the end of 2012, and only about $30 billion has come back in. so we're nowhere near at a point that would suggest a tremendous amount of froth or irrational exuberance. i think it's good news they're starting to come back. they're doing it very cautiously. they're going into defensive sectors. this is very different from what we've seen in past market point. >> how do you want to invest, liz ann? what would you be exposed to. >> we're keeping our cards still
4:07pm
fairly close to the vest until we get through some of these other policy issues, like the government shutdown, which seems to be out -- not a problem right now. the debt ceiling. so we only have one out-perform rating right now, which is technology. that's been a long-standing outperform for us. one underperform was consumer discretionary which is the potential for problems because of the tax increases. it turns out it's not having the impact on consumer spending as a lot of people thought. >> great advice. thank you so much. great to you on the prom. liz ann sonders and heidi moore joining me. up next, we're on the money. what is starbucks' recipe for success? my conversation with the company's founder and ceo about how he wants to do for tea what he has done for coffee. and how health care may not be so healthy a business. and later, talking tough on the smartphone market. can a new phone from a glass economy not so far away take a bite out of apple? what innovation means for your personal technology use, as we take a look at how the stock market ended for the week. back in a moment.
4:08pm
4:09pm
4:10pm
welcome back. president obama pushing for an increase in the minimum wage to $9 an hour. but business is debating the unintended consequences of such a move. this week i caught up with starbucks ceo and founder howard schultz to talk about that, farming, and how high-tech is driving his business. >> some big news in the day was taking our loyalty program and our mobile payment business, which is very strong in our retail stores and leveraging it into the grocery store. so a customer buying a pound of coffee or a bottle of frappuccino at their local grocery store will get a reward and incentive to bounce back into the u.s. retail stores. >> you have been leveraging technology for a little while. how is that partnership with square going, howard? >> really well. you know, we made a $25 million
4:11pm
investment in square because of the seismic change in technology, and specifically, smartphones. we are now the leading retailer in consumer brand in the world in terms of mobile payment transactions, over $3 million a week. so we are i think very enthusiastic about what will payment, our partnership with square. these are very early days of what we're ultimately going to be able to do. >> and you are also on an acquisition trail. we saw wit evolution fresh. we saw it with teavana. should investors expect even further deals in 2013? >> i would say that if we do make any more acquisitions, they will be very, very strategic and very pointed to the fact that we want to add high quality products and categories that would enhance the customer experience in our stores. we're off to a fantastic start with evolution fresh and la bolange, the acquisition of teavana, we believe we can have at least a thousand stores where
4:12pm
we can do for tea what we have done for coffee, leveraging the infrastructure of the company, and eventually we'll take teavana outside of north america. >> and this week you acquire your first farm based in costa rica. tell me about that strategy. >> we are the largest buyer of high grade arabica coffee in the world. we're buying coffee from over 30 producing companies. we bought that farm for two reasons. to create a very high-end significant sustainable practices that we can use as a model to teach other farmers around the world. and secondarily, this is very important, we believe that there is an opportunity to use technology and best practices to cross varieties, not unlike the wine industry with grapes and create microlots of very special rare, very high quality coffee that does not exist that we can bring into our stores and provide long-term differentiation between us and everybody else. >> okay. let me move on to what is going
4:13pm
on in the u.s., howard. what are you seeing in terms of economic growth? >> i think when the 2% payroll tax went into effect in february of this -- of last month, the entire retail and consumer category in terms of consumer behavior was modified as a result of that 2%. we have since, and i think others have seen it, come back. i'm cautiously optimistic about the economy. it seems as if despite the unemployment, despite the debt, that consumers were spending, and we are enjoying the same level of success that we've enjoyed the last 12 months in the u.s. business. >> what about the minimum wage in this country, howard? is 725 enough? lots of pushes to take that up to $9 as president obama as talked about. >> i think the minimum wage issue is a double-edged sword. and what i would not want to see
4:14pm
is the minimum wage go up and as a result of that employers starting to hire less people or cutting people's hours. and so you have to be very careful of the unintended consequences. on balance, i am a supporter of the minimum wage going up, but i think we have to be very, very careful. and i would say in terms of the health care law that is going to go into effect, there are significant unintended consequences that was not thought out as much as it should have that will significantly affect the cost structure of small businesses. and this is an example where i think you've got to be very careful with this kind of transformation legislation that ultimately perhaps has a negative effect on the economy. >> before you go, you've got to give us some reaction to this comic book basically about your life. you're now a superhero, howard. >> that's one of those things where i woke up one day and i could not believe that somebody would spend the time writing a comic book about me.
4:15pm
there must be a lot more important things to do. >> i love it. nice to have you on the program. >> thanks, mar yankees, howard schultz is ceo and chairman of starbucks. up next, we're "on the money." the newest battle in the smartphone wars. the iphone losing some of its hip in favor of newer models? we will enough about the book, i want to hear about your date.
4:16pm
well, he showed up in a van. [ women ] oh-awww. [ voices in background ] [ female announcer ] swapportunity. the opportunity to swap a higher calorie snack for a delicious 90 calorie yoplait light. ♪ sorry... about your date, the details of your date. [ female announcer ] just one swap a day helps keep the calories away. yoplait. it is so good.
4:17pm
4:18pm
americans now own a smartphone. last year was the first they took a majority of market share from all mobile phones in the united states. apple's iphone has dominated consumer imagination now for years, but fresh competition is heating up the smartphone wars. dan ackerman is senior editor at cnet.com and he is here toe talk about it. good to have you on the program. >> good to be here. >> apple and samsung accounting for one in two smartphones sold today. tell me what the competition means for the choices out there. >> i think we have finally gotten to a point where it's not just an until the iphone. we have samsung up as the pepsi to their coke. and these two companies really control most of the market share. and when you hear about a hot new phone, it's going to be one from one of these two guys. >> i think it's interesting there are 5 billion cell phones on the planet versus 1 billion pcs. everybody wants a phone.
4:19pm
>> a country that doesn't have a laptop you have a phone with you. >> let's talk about some of the smartphones out there. samsung just announced the s4 galaxy phone, a splashy event they had than. what is your insight than phone? >> that's the big five-inch phone they had at the press event a couple of weeks ago. i checked it out. it's a really nice phone. it's a huge screen, 5-inch screens, they make them much more like portable computers. it does a lot. it's g a great camera. my big problem is it's a plastic phone, and everyone else has a metal and glass iphone, that's tough to compete with. >> plastic phone? >> i know. i don't understand. >> what about the blackberry 10, officially available in the united states. everybody has been waiting for this new blackberry. what do you think of the phone? you brought it here with you. >> i have the blackberry z10 right here, and that is blackberry's latest attempt to get back in everybody's good graces. it's a crossover device. >> it looks like the iphone. >> it's thin, it's brick-like, a big screen, a nice camera. so it does pretty much
4:20pm
everything these other phones do, but it's only just as good as them. it's not really better. it's tough to bring people back to blackberry without a product that is really better. >> the company is no longer called research in motion. it's calling themselves blackberry. what will this revamp of blackberry's branding and the z10 phone mean for the business? >> for a couple generations they've tried to nail this consumer product that is a big, slick smartphone without the physical keyboard, although they still have those. they have not succeeded up until now. this one got some good buzz building on it. the reviews have been good. people like the hardware now. people like the software now. they sold more than expected in the initial launch in europe. we'll see what it does here. >> what about the htc one? that's a new version expected to be available any day. you brought that as well? >> htc 1. that is a very nice smartphone. it's similar to an iphone or samsung. i like it better than the samsung because it has a metal
4:21pm
body instead of the plastic body. if you want something iphone-like, you don't want a plastic bodied phone. >> you can do everything on the phones? >> we're pretty much a parity with the phones. they all take good pictures. they all run popular apps. they all surf the web, do facebook and twitter. you're buying on which one you like better in terms of design and the special things they do. >> what kind of innovation are you expecting? what would you expect for the smartphone market and how things evolve? >> i think we're going to see a move towards bigger screens, five-inch, even a little bigger as people use these instead of their laptops or tablets. you don't have to take the big shoulder back with you with the laptop, and maybe things like motion control, like you hover your hand over it instead of tapping it or eye control where you can scroll up and down by look agent the phone. >> wow. they're talking to us. they're touching us. it's amazing. >> and now they're watching us. >> and now they're watching us. dan, great to have you on the program. >> thank you. >> thank you so much for walking us through this market. dan ackerman from c/net.
4:22pm
when you're trying to travel for peanuts, which city gives you the best bargain on the mini bar? trip tricks, coming up. stay with us.
4:23pm
4:24pm
for more "on the money," check out the website, otm.cnbc.com. i hope you'll follow me on google and twitter, plus look for me @mariabartiromo. first a look at the week
4:25pm
ahead. ben bernanke appears at the london school of economics. he will appear with the chief economist of the imf. on tuesday more housing news that will be released. the s&p k schiller home den index is out as well as the number of new homes sold last month. on thursday the third revision of the gross domestic product for the fourth quarter of last year. and good friday wraps up the week. banks will be open, but u.s. equity markets are closed on friday for good friday. and saving your pennies when the hotel bill comes. trip adviser released the first index of room service affordability, comparing how much hotel travelers pay across the country for common incidentals. denver was the biggest deal. a combined cost of a club sandwich, a water, a coke and a mini bottle of vodka add up to $40.46 in the mile-high city. the same bill will run you more than $60 in honolulu, where a club sandwich tops $20 for that
4:26pm
sandwich. at least in hawaii the sandwich comes with a view. that will do it for the show today. thank you so much for joining me. next week, just what the doctor ordered in startup nation. how technology could make your health care better and cheaper. each week keep it right here. we are "on the money." have a great week, everybody. i'll see you again next weekend.
4:27pm
>> this is "the chris matthews show." >> ask not what your country can
4:28pm
do for you. >> tear down this wall. >> i can hear you. >> the time for change has come! chris: had enough? is that the spirit of america today that we had enough of wars in the land of islam. we listen to the bugle car from the bushes father and son. after the gulf war, the afghan war and the iraq war, are we ready for war with iran and syria? spent billions of rebuilding in iraq, baltimore, detroit, they could use the big money we're spending on countries that take our cash even as they tell us to leave. finally, see how she runs, hillary clinton's message on marriage equality fits her m.o. precisely, a scripted, polished dramatic video is just how she announced last time. looks like she is in. hi, i'm chris matthews, welcome to the show. with us today, the "washington post" david ignatius and kathleen parker. helene cooper and michael crowley. first up, what does barack obama know what we don't know pledging
4:29pm
to use american power against iran and getting more deeply involved in syria? the american mood when it comes to using force feels like 1915, the end of vietnam. after that war, reluctance to commit power abroad was called vietnam syndrome. then came desert storm in 1991 and the first george bush told us that the lightning victory there had banished vietnam wearyness. >> it's a proud day for america and by god, we have kicked the vietnam syndrome once and for all. chris: after the second george bush launched two long wars, many feel war wearyness like against vietnam. against the wearyness, how should we take this week's statements from this president on veryia and iran? >> we are clear that the use of chemical weapons against the syrian people would be a serious and tragic mistake and i will repeat, all options are on the table. we will do what is necessary to prevent iran from getting